Summarizing Jamie Dimon's Congressional Testimony

As expected, absolutely nothing new was disclosed in today's latest Jamie Dimon dog and pony show. To summarize what we did learn:

"JPM is not too big to fail, but it is not at risk of failing unless the earth is hit by the moon"

"We make CDS for the benefit of veterans, retirees, orphans and widows"

"We only bought Bear's assets in a firesale while the Fed backstopped its liabilities, because the US government made us"

"VaR can be made to show anything. We have a closet full of models"

"Gambling is not investing"

Finally, Jamie Dimon once again refused to disclose the to-date losses on the CIO trade, but promises the firm will be profitable. Which only leaves one question open: how much "profit" from "reserve release" and "DVA", aka blowing out in JPM CDS, will the firm need to take to mask the CIO losses?

Dirk van Dijk, writing for the investor websiteZacks.com, explains what a good deal this is for the banks:

“Keeping short-term rates low . . . is particularly helpful to the big banks like Bank of America (BAC) and JPMorgan (JPM). Their raw material is short-term money, which is effectively free right now. They can borrow at 0.25% or less, and then turn around and invest those funds in, say, a 5-year T-note at 2.50%, locking in an almost risk-free profit of 2.25%. On big enough sums of money, this can be very profitable, and will help to recapitalize the banking system (provided they don’t drain capital by paying it out in dividends or frittering it away in outrageous bonuses to their top executives).”

This can be very profitable indeed for the big Wall Street banks, but the purpose of the near-zero interest rates was supposed to be to get the banks to lend again. Instead, they are investing this virtually interest-free money in risk-free government bonds, on which we the taxpayers are paying 2.5% interest;

WRT Dimon: "Gambling is not investing." But investing is putting capital at risk; intelligently we hope. So, let's admit that investing involves an element of gambling; unless the certainty of interest arbitrage is the essence of the bet; in that case it is simply self serving.

Umm, have the Tyler's brought up the fact that by disclosing this loss, JD is basically telling everyone to pile onto his position, while creating himself an opportunity to hedge the other way? I mean, really a $2b loss? Seriously?

Actions speak louder than words. If Jamie Dimon really meant it, he should definitely help out on the food drives and donation collections for all the old people he put out of their homes, the uneducated kids who dont have enough to pay for tuition and the many others who lost everything because of his and his brethren's actions on Wall Street.

Dimon and Blankenfein do not exist. THey're just imaginary financial Hilters who know how to vacuum the money out of a society going through a trade/investment deficit. i have no idea of what you're talking about. There are these old men on Wall Street in NYC who will make you blind for three days if you look at them.

How can you guys focus on what JD said instead of the shit flying out of the pols mouthes - particularly the semen drenched idiocy flowing from Barney Franks mouth (or was it his ass. Hes so ugly who can tell. And both are full of semen and bullshit).

Don't feel bad, our boomer voting majority really believed him when John Lennon convinced people that he was a non-materalistic beatnik (in reality he was a patronizing RICH wife beating person)... our voting majority will believe anything.

I think the Libertarians get this too well. And I mean ANYTHING. THey still think that God took the word "Gullible" out of the dictionary, they and their socialist Law Students are still looking for it.

The boomer voting majority would actually believe Dimon over the stiffed and homeless widows, vets and crippled children right in front of them.

He didn't say "is not at risk of failing unless the earth is hit by the moon". Duffy asked: "Do you think JPM could lose half a trillion or even a trillion dollars?"To which Dimon responded: "Not unless the moon hits the earth."

mr dimonpunk is so full of himself....the losses which his bank will endure will be no match for loan loss releases....jpm is a financial soap opera and it will see red for a long time to come thanks to its conspiracy with the treasury and congress to screw with interest rates....can you say interest rate swap implosion? i knew you could......

but investing is gambling. gambling supposes you have no choice in the outcome of the game; like a slot machine for instance, or a 401K. (i mean you can choose your casino) gambling supposes a risk, when there is NO RISK you have a sure thing (kinda like no we can't lose unless the moon hits the earth because the game is rigged, we are backstopped by the government, who also tells us what to do) but as every gambler (and every con man knows)

there is no better mark than someone who doesn't believe in gambling, because only someone who believes there can be no risk (someone either religiiously or ethically disposed to avoid gambling) who BELIEVES IN A SURE THING. the gambler knows better. by example the great American Musical, The Music Man, where a con-man works the hicks, (while the hicks grow corn which is a huge gamble, but try and tell them that) because they don't believe in gambling, and knowing that the conman knows they are more easily convinced that he is selling a sure thing.

the con man wants us to accept his motto, there is gambling going on here!! you are being swindled!! hahahaha

Day after day I continue to be amazed at how well informed & intelligent my fellow ZH users are. I am a 99%er Manufacturing Engineer by trade. MY small town Midwestern opinion is that Mr Dimon came across as being very arrogant! I was not impressed.

"Gambling is not investing." Quite right, and since investing is no longer possible (markets are currently managed to prevent price discovery), we'll gamble instead. But don't worry about risk. We'll buy insurance, in the form of congressional campaign contributions.

"JPM is not too big to fail, but it is not at risk of failing unless the earth is hit by the moon" "We make CDS for the benefit of veterans, retirees, orphans and widows" "We only bought Bear's assets in a firesale while the Fed backstopped its liabilities, because the US government made us" "VaR can be made to show anything. We have a closet full of models" "Gambling is not investing"

We have the US Government by the small hairs;

We'll squeeze until in hurts;

Just like a tsunami, well ride on the top of the floatsom and jetsam of sovereign debt implosions around the world;

...and will end up resting on the top of what resembles viable governments when the seething mass come to rest.